With outstanding career opportunities, a stable economy, and an incredible entertainment scene, Ottawa is the perfect spot for Millennials and other young home buyers to put down roots. The benefits of owning a home here are numerous and undeniable for those who are ready to take this step.

Yet as exciting as it can be to reach the milestone of buying your first house, higher real estate prices have made it far more challenging. In this post, we’ll provide young buyers with an overview of the opportunities in the Ottawa real estate market, along with some tips about getting into your first home sooner rather than later.

A Place for Stability

An abundance of government jobs and a thriving technological sector provide a level of economic security that is hard to find elsewhere. This stands in contrast to the trend where people change jobs every couple of years. Instead, many employees find meaningful work in long-time roles with above-average income they can count on.

Even as real estate values rise, this financial stability goes a long way toward the ability to buy a house. A thriving economy is one of the many reasons why many Millennials and Zoomers are starting to turn their eyes toward Ottawa.

---

Should you consider Ottawa as you prepare to buy your first home? The posts below will give you food for thought:

• Ottawa: More Than Meets the Eye
• Is Ottawa Boring? No, and Here’s Why!
• The Best Ottawa Neighbourhoods for Commuters

---

Introducing the Property Ladder

If you’re new to real estate, you may not be familiar with the term “the property ladder.” This refers to getting into the real estate market in any way you can. You don’t have to start with a spacious four-bedroom home on a large, manicured lot. That can come later after you own property and have begun building equity. 

Once you’ve got that first foot on the property ladder, your net worth will grow as your starter house increases in value. Just getting into the market now, even with a small condo, will empower you to move up the ladder later on as you become more financially stable.

Investing in Ottawa real estate presents you with multiple options, from less expensive starter condos to beautiful heritage homes and stunning new builds. You will have many opportunities as time goes by if you get your foot in the door now.

Meeting the Challenges of Affordability

Life is becoming more expensive as inflation affects the cost of gas, food, and other essentials. Many would-be home buyers are staying in the rental market longer than they anticipated due to these affordability concerns. This is understandable since the barrier to getting a rental unit is lower than buying a home. 

However, owning a place of your own can actually be more affordable in the long term. Not only do you no longer have to worry about receiving an eviction notice, but you’ll also be building equity and financial stability. 

Once you own your home, its value will continue rising, but your monthly payments will remain unchanged. In addition, each mortgage payment brings you closer to paying off your loan in full.

You don’t have this security as a tenant where the landlord is allowed to raise the rent by a certain amount each year. As housing prices rise, so will the cost of rent. Owning a home offers you a level of protection against rising costs and inflation.

Think of it this way. After 25 years, you will be mortgage-free, and a significant portion of your monthly income frees up. Continuing to rent is an expense that will never go away and will become more expensive over time. 

What Will You Need to Buy Your House?

Even for a dual-income household, the prices of Ottawa real estate can seem intimidating. How much would you need to purchase a house in the fast-paced market today? A little financial reflection is necessary before beginning the quest for the perfect home.

You’ll first need to ensure you have enough to cover your down payment, monthly carrying costs, and any closing costs associated with your purchase. The total amount will depend on the final price of the home. 

• A 5% down payment is required for property priced at $500,000 or less.
• For any amount between $500,000 and $1,000,000, you need 10%.
• 20% is required for anything $1,000,000 or more.

Let’s imagine that you’ve got your eye on a condo priced at $550,000. If that ends up being the final amount, your down payment is $30,000 ($25,000 + $5000). However, now imagine that you’re lucky enough to be searching in a buyer’s market where you have some negotiating power. Your real estate agent helps you craft an offer at $500,000, which the seller accepts! This reduces your down payment to $25,000, making your barrier to entry a little easier.

Before you’re ready to submit that offer, you’ll also need to be prepared for closing costs, which include land transfer taxes, legal fees, and moving expenses. The good news is that many of these can be included in your mortgage and spread out over time.

---

Knowledge is power when it comes to getting fantastic results from your home purchase! The resources below will help you hit the ground running:

• Strategies to Help First-Time Buyers Enter the Real Estate Market
• Does Real Estate Protect You Against Inflation?
• What are the Signs You’ve Found a Great Realtor®?

---

Help for First-Time Buyers

Buying your first home is a big step, but it’s comforting to know that you are never on your own. Chances are, you have family members who are happy to help. They can offer guidance and support even if they are unable to contribute financially.

An experienced real estate team can also help by uncovering the ideal listings to suit your needs while advocating for the best terms and price in the current market. Even the government has programs in place to help first-time buyers take that initial step onto the property ladder. 

• First Home Savings Account: This plan allows you to save up to $40,000 with no tax penalty, at a maximum of $8,000 per year to put towards the purchase of your first home. Though your contributions are capped, your investment dividends are not, which can add up to substantial growth when the time comes to buy.
• Home Buyer’s Plan: If you have funds in a tax-sheltered investment account, such as an RRSP, you can pull out $35,000 tax-free for your purchase. Under the proposal for the new budget, this allowance could increase to $60,000.
• Land Transfer Taxes: Land transfer taxes are the most significant closing cost home buyers face. Fortunately, first-time buyers can claim a rebate of up to $4,000, which makes getting into the market more accessible. 
• First-Time Home Buyer Tax Credit: You can claim up to $10,000 on your taxes the year you buy your first home, which adds up to a credit of $1,500.

Do you want more advice or tips to help you enter the Ottawa real estate market? Our knowledgeable and compassionate real estate experts are standing by with whatever you need. Contact us today at mail@chellteam.com or call 613.829.7484 for more information.